Moreover, crediting another company account such as accounts payable will increase its balance. In accounting terms, however, if a transaction causes a company's checking account to be credited, its balance decreases. For example, if our bank credits our checking account, money is added to it and the balance increases. To avoid confusion over debits and credits, avoid thinking of them in the way that they are used in everyday language, which often refers to a credit as increasing an account and a debit as decreasing an account. By summing up all of the debits and summing up all of the credits and comparing the two totals, one can detect and have the opportunity to correct many common types of bookkeeping errors. The double entry accounting system provides a system of checks and balances. Actually, more than two accounts can be used if the transaction is spread among them, just as long as the sum of debits for the transaction equals the sum of credits for it. Two accounts always are affected by each transaction, and one of those entries must be a debit and the other must be a credit of equal amount.

Entries in the left column are referred to as debits, and entries in the right column are referred to as credits. Whether the entry increases or decreases the account is determined by choice of the column in which it is entered. In double entry accounting, rather than using a single column for each account and entering some numbers as positive and others as negative, we use two columns for each account and enter only positive numbers.

Debit credit chart